Don’t Make This Change Order Mistake, Or It Will Cost You Big Time
By Alex Barthet
What Is A Change Order?
A change order is a change to a contract. It typically addresses one or all of the following three things – the scope of the work, contract price, or time. But there are other things that can be modified with a change order. You can add or remove terms to a contract by using a change order. It can be written, but it also can be oral, meaning that you can receive a verbal directive to proceed with a change that is a valid change to a contract. However, this depends on what your underlying contract says. Many contracts state that only written signed change orders are valid. If that’s the case, be aware that if someone tells you to do something without a written change order, you may be hard-pressed to prove that it is a valid change order. It is better to have it in writing to avoid any confusion later about what the parties intended to be part of the change.
What Is Missing From That Change Order?
The most common thing that we see missing from almost every change order is time. It is rarely used and often ignored until it’s too late. Most people realize they need to add time to their change order too late in the process, and when they try to add time to their change orders, that change is typically not accepted. What we typically see is people leaving the time section in the change order blank (which under the law generally means zero), or they specifically write zero, or they write N/A. In all three cases, it means no more time is added to the contract.
Why is it so critically important, and why should you make it a point to add time every time you submit a change order? I would argue that time is the most valuable resource on the project, even more valuable than the materials, labor, and the dollars. The reason is that under no circumstance can you ever get it back. So, you need to make sure that you protect this resource. When you sign a contract that requires you to do some things within a certain amount of time, you either have a specific amount of time or a specific end date to complete the task. Know that the date is not moving so you need to move it. You do that